it's vitri or vytr, nail repair treatment. $22.95. you can get it at drugstore.com less.com. in one month feel my nails now. >> oh, my gosh. >> came back so strong. this stuff's amazing. >> i want to get that. mine is something that andy cohen gave both me and you. ey sell them in stores. if you're not sure if you should have wine or a martini and you don't know why don't you get a glass that has both? it's called vinotini. if you want a martini you drink it this way. if you want some wine you drink it this way. they sell them in stores $17.99 on amazon. i think i'll have a martini. oh, wait, i'll switch to wine. >> all right. tomorrow real estate maven and your bff -- >> nobody likes the word may have been. barbara corcoran is going to be here. >> what's do we have?
real moms back to school flips and all kinds of other stuff that we have no idea. butt have a great day. >> nice talking to you. >> and reid alexander. love him! my vision is simple. to make you money. i'm here to level the playing field for all you investors. i promise to help you find it. mad money starts now. welcome to welcome. my job is to educate you and to teach. so welcome. tweet me at jim cramer. iiant to talk to you about the big picture. about building wealth in general and not just owning stocks in particular. stocks are just one part. absolutely the most important part but still one part of building real wealth. there are some people, call them
from the ordinary dayo day to become the truly rich. for the vast majority of americans, it is not enough. you need to work with it. if you keep watching, i'll tell you how to do that. for the rest of your life. now usually i come here and tell you what i think of the market. stocks to invest in. the truth is before you even start investing in stocks, there are a lot of other things you have to do if you want the payoff to actually mean something later on in life. when you most need the money. you may not want to hear this but it is fruitless to think you can get rich in stotos without building wealth before hand. market. if you're hemorrhaging portfolio won't do much for you. at best it will keep you afloat. if you had planned better, it wealthy.
there are three necessities. three things you must take care of before you consider owning a stockism assume you have this taken care of but here on mad money, i feel like i'm sometimes amiss. very few high schools or colleges will teach you a thing about managing your finances. you might learn a aut literature or marxism. that doesn't mean i can't offer this. i know from your e-mails and of course on jim cramer on twitter, that many of you crave there education. you ask for it every day. i'm done ignoring it. what are the three things you must do before you can own stocks? first, you've heard it a million times. it sucks the life out of everything. i need to say it and you need to hear it. you have to, you have to pay off all that credit card debt. i like to be entertaining as
i'm not someone who believes it should be cut into little pieces. i've seen it done in hand bags. credit cards are evil and should be burned in effigy. you're paying an extraordinarily high debt. you're paying a loan shark, now, it would make a loan shark blanch. the late great tony sparano would give you better terms. to be fair to the credit card industry, they won't break your knee caps if you can't't pay them back. however, they will make you pay penalties and fees. in between college and law school i owed a huge am of money to various creditors. i had very little left to live on. initially because of some rotten luck andnd a real bad break.
i ended up living in my car. i still managed to put a few bucks away into a retirement account. by the way, his first ask, one up on wall street. remains the text for understanding the market that has ever been penned. it is on amazon. once i knew where i was going to live. even though i was in hock. the credit card company issues found me. and i took a bunch of them down. pretty much everyone who offered me plastic. i figured could you pay the minimum on each one and keep stringing everybody out. the credit issuers never seemed to find. i had four of them going at one time. i had four and i was offered one more. when i offered up the minimum payments and charges, i realized rent. i wanted to default but feared the consequences.
i ended up restructuring my noncredit card debt with a collection agency. they found me as soon as i skimmed on them. and their easier paying plan gave me just enough breathing room. i was able to get some nice legal work and worked on the trial. even though the hourly rate, almost every penny went to the credit card companies. there was nothing left for me. i handed a drive at goldman saxs. i was able to pay off those bills. in the end i couldn't stomach opening the mail. not everybody is as fortunate as i was. i am realistic and know whereof i speak when i say there is no way you can make enough money away from these card issuers to save in any meaningful way. let alone pay rental and put a
even with good credit, let alone the credit i had, you can still be paying around 15% annual interest. if your credit is not so hot, you might be talking about 20% or 30%. a darn good year for many hedge funds. if you have a big balance, pretty much all your gains will be sucked down the drain. nothing you can do about it. so if you go into credit card debt, stocks will be a hobby for you. stocks can't be the wealth generating machine they should be. all the wealth will be kansas he told out by the amazing wealth destroying powers of the credit card debt. i know i sound like your parents but your parents are right. i said there are three things you need. the second is health insurance. you should not invest a penny before you have health insurance. you might think the affordable
if you don't have it you pay a fine. the penalties aren't big. but they get bigger over time. even if you that reject obamacare, at least get some health insurance. all kinls of subsidies to make it more bearable. medical emergencies are the single biggest cause of bankruptcy in this country. i've been there too, without insurance. i had no health care plan and had to drive hours to get to a farm workers clinic to see a doctor. i know you don't think it can happen to you. and the younger ones can feel invulnerable but believe me you're not. one visit, they can there crush you. sure you can get coverage even if you have a pre existing condition.
it is a heck of a lot cheaper to buy insurance before you get sick. and you will need health care at some point. everybody does. lastly, you need disability insurance. the rationale is pretty simple. without these two kinds of insurance you can get wiped out in a second. all the precious gains will be wiped out. you didn't have health or disability insurance. in short pay off your credit card debt, get health and disability insurance. the last two are offered by many employers so you have no excuse for not getting them. if you also think you can afford to own stocks. these are essential element in your strategy for capital preservation. remember, we talk about capital appreciation. you grow your investments. we always acknowledge the capital preservation comes first.
you need that to protect your money in the present if you want to grow it in the future. paying off your credit card debt and getting health and disability insurance. without them investing doesn't make any sense why. bother? with heavy credit card debt, without health care and disability, building equity can be futile. so start that tomorrow. in connecticut. >> hi. >> how are you? >> caller: i love your show and i appreciate you taking time to call me back. i quit my job two years ago. 67 years old now. i have $400,000 in a 401(k). i've been trading myself in small cam. i haven't done it recently, thank god. i don't know if i should roll it into an ira? >> do you like what you have in
>> we have a self-direct brokerage. i was in the fidelity alert. >> you should stick with it. you're in good shape. stick with it. i like what you've got. let's go to mike in new york. >> caller: hey, mr. cramer. how are you? >> how are you? >> caller: i'm fine. i've been a retire police officer for two years. i've been in the city pension program for over 20. what is the difference between a 457 plan and a roth ira and what are the benefits of the pros and cons? >> i'll have to ask you to check with your people at your pension plan. it is too important. i am very sorry. that's a personal decision to you and i don't feel comfortable actually offering advice on that particular situation.
before you can even think about investing in stocks, make sure you're building a foundation for long term wealth. get insurance. you know i want you to be diversified. i'll show you how to balance your retirement plan. should you ever tinker with your contribution level? plus the 401(k) isn't the only game in town.
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subject we don't talk enough about. long term wealth building. if you're serious about getting rich and staying that way, you must do two things. first, to go amazon and buy the entire jim cramer catalogue. now that i got that out of the way. the second thing you should do, even if you're in the early 20s and you're only just started working. you've got to start saving now. i didn't say save for retirement. i said prepare. you're just stuffing your money in the first national bank, stuffing into your mattress, saving in an ira, great though those two may be, they might not be enough to prepare for retirement. should you take an active hand in setting yourself up for retirement. getting your hands dirty. those with a fixed income, you
with that minimum reward, not worth the risk. that's what i'm here to do. young people, don't turn off the tv. if there is anyone who can make this sound interesting, it's me. you need to learn how to do this sometime. wouldn't you rather learn for a guy who has been around for ages? even though he sometimes carries hand bags, the sound effects that drive points up. before i get going, i promise to give you some useful advice that you can't just find on the internet. so many of these have been promoted ad nauseum that i think it is not worth calling it advice. should you put money into an individual retirement account in ira? yes, you should. that's not advice. that's just a fact. yet people say use your 401(k).
cut up your credit cards. don't spend more money than you make. there are people who will still tell you, just that, just those points and assume it is enough to help you get ahead. i say it is not. basic responsibility. like diet and exercise, please. i'm the guy who tells you where to go from there. i didn't make a career after giving people money advice. i've made a career out of using money to make more money. i came into this business later in life. so what useful advice should i give you beyond handle the using your 401(k) man and your ira. you don't pay money on the taxes. how about some advice you should
not do? the conventional advice says to leave on it its own. what should you not do with your contributions? first and foremost, don't use much of your 401(k) money to buy stock in the company you work for. i'm far from the first person to say this. company stock is still the most popular 401(k) stock out there. more people put the retirement dough into the stock of their employer than any other investment. i cannot tell you strongly enough how unwise that is. it you call in. you tell me your top five holdings. you have all five eggs in separate baskets with no companies that are part of the same sector. when i tell you this, real money.
regular viewers know if you expose too much of your portfolio, you are running an enormous risk. suppose you had all your money in text stocks. let's say the beginning of 2013, a little more current. your entire portfolio was in stocks. beyond yields were so low. investors looking for income had no stocks with notoriously bigger. then interest rates has not to increase. all the high yielding stocks, they got crushed.
so you lost a lot of money even though. we're going to get more interest rate spikes. of. now apply that logic to your 401(k). do you really want to invest into the same place as your paycheck? what if you worked for enron, or eastman codeack. or any other company goes under. it is lose/lose. do you think it is conjecture? i used to have a radio show mom telling me to stop bashing enron. i said they may diversify away from enron. each time i did it i heard about how they got discounts. such a great company was too
the fact is it was down so much they couldn't sell. then one day. it was gone. many people have made this argument before and the company stock is still the number one investment. why? you understand the excuses. i'm telling you, that excuse doesn't cut it. you have to cut back. just cut it back tomorrow. here's the bottom line. diversification comes before everything else. so never put more than 1/5 of your retirement money in the stock of the company you work for. just like i advise not putting it on more than one-third of the sector. you're doubling down. stick with cramer if you want to know about how to manage your retirement money so you can go
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of scam. how about "breaking bad"? i love how he came on "mad money" and talked about apples. that darn pure blue meth sold itself. but ancient spoiler alert, that get rich quick scheme ended real bad. the best motor releebl way. tonight we're talkinging about long term wealth building. this is especially critical when your. you're preparing for environment. it is possible in this era of very low interest rates, which seem like it could go on for a long teem. it could be too cautious too, recollection averse, and you're
something you see that poem and reerm. it sounds like you're going to sock the money away. maybe a long term bond fund. no one want you to do. that's not how it works. most people put money away for retirement and feel like they haven't take on too much risk. if you have stocks, you believe there is down side, that is not all that jenl. i call it recklessness. investing none of your 401(k) in stocks is far more likely to jeopardize savings in the long
when you're investing for retirement, you noted to generate. if you are too risk averse, meaning if you load up on bonds in your 20s, 30s and 40s, avoiding stocks because of the risk, and i see plenty of 401(k)s like this, you will never general rate enough money to retirement comfortably. return. there. with that low rate, you're base. money. perhaps a lot more money. let's not forget that bonds aren't always the epitome of risky. the bond prices will fall.
felt by known who puts money in a long term bond official. so many female that will happen. i'm not one of them. it means you likely won't generate enough when you want it. and there's a down side risk. they can drop enough to raise two or three years worth of coupon payments. interest rates skyrocketed in 2013 if you timed it wrong. what else falls under the category? how about one of the most popular vin he isments out there. stable value funds. that sounds very reassuring the truth is this is a fun that
less return. if the return from nothing but bonds is too meetinger to build wealth, then the stable funds are even worse. my goal of the show is to use your money to make even more money and it means you can't be on your auto that i will put money into things leak treasury bonds. you're saying, this, i'm not going to use to it generate more wealth. either you cling to safe and when it is time to retire, or you take some recollections. being broke is a pretty sure way to be miserable. i'm not saying there is no place
for bonds. as you get close to. it is an option until much later in life. pensions were bigger. life expectancy is shorter and interest rates were not being kept down by a federal reserve that wants to keep the economy moving. spending even more time for him. >> and yield that's used to be enlts which youy. >> those long term bonds might do better in owning the common stocks. if you can't pick your own stock, the best way to invest is
the kind of stocks that, in any 20-year period. as you get older, you can and should take some of that stoik money off the table. only some. my rule of thumb is that you should keep 10 to 20% of your time in bonds. no reason to turn 30s. then 40%. from age 60, it may sound like difficult. you should still own some stocks. they can generate more income with not that much risk. i think they should be about a third of your portfolio. i know that is aggressive.
the convention will wisdom was coined a long time ago. you'll need the extra long time from stocks will run out. not only stocks is glenls your own long. i'll give you more specific tips to make even more money. shawn in new york. >> caller: thanks for taking my call. my uncle got me looked on your show. i love it. my question is about a roth aisha. recently graduated from. my question is i have the money invest in the broad stock index funds. i want to know how i can invest
more aggressively. >> someone is looking at gref growth. in the next ten years you got a shot at making a lot of money. if we're in the same conversation, you can pull back. this is your chance to risk that money. you have the rest of your life to make it back. >> long time first time. i would like to hear your thought on a buy at home strategy. an annual growth of 10 person to people. >> i always say how can you have consistent growth if third not consistent. i remember, exactly what you said. one day it disappeared. disappeared.
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on the 401(k) man's or earas. right now i want to share with you my favorite piece of 401(k) advice. this is not some abstract idea. a difference based on how i manage my own 401(k). you know what i am about to tell you is worth hearing. most people will take advantage of the 401(k) plan contributed on a monthly basis. and usually it is automatic. taken right out of your paycheck. every month you end up putting in 1/12 of your critical. there are people who will tell you to leave it alone. to just passively invest your money. i am not one of them. why not? there will be time when the margaret takes a hit. a big hit. why would you contribute every
stock market changes? so here's how you can take advantage of a big decline will when the stock market pullbacks are the reason. whenever you get a 10% dechina in the s&p 500, what should that would you have to double down. that month you put in twice your normal amount. mean 1/6 over what you man to eninvestigate. if the market stays down, the year might be over. this is what i do. it if you embrace the 1/12.
contribute every month, month after talking. i'm talking about investing it. or if you're using an actively managed funds with a manage we are a long record of consistent performance. you probably can't find a mutual fund like that. it is usually best to stick around will this make a huge difference? maybe. it. just to observe what was happening in the mark and respect. not taking the closer approach. pay attention. you can double down and invest twice your normal contribution that month. take advantage of the cheaper
when you have a long time no different from sale at your local police department that's the right way to manage your portfolio portfolio. karl, don't you have friends coming over? yeah, so? it stinks in here. you've got to wash this whole room are you kidding? wash it? let's wash it with febreze. for all the things you can't wash, use... ...febreze fabric refresher whoa hey mrs. webber inhales hey, it smells nice in here and try pluggable febreze... ...to continuously eliminate odors for... ...up to 45 days of freshness pluggable febreze and fabric refresher... ...[inhale + exhale mnemonic]...
while we're on the subject of long term wealth building, i need to tell you the b the limits of what some consider to be the holy grail of planning. i'm the first person to admit that it can be a vital part of setting yourself up for a cozy retirement. os ten today,ly wealthy? why not? i'm not one of those that says you should max out on your contributions. your 401(k) is important but it has its down sides. plenty of them. you will hear people say high matching fees is a problem and they'll eat away. but for my money, the worst thing about most 401(k) plans is the lack of control of your money. i believe the best way to invest.
more and when it is time to sell and when it is time to sell everything. which is very rare, by the way. most 401(k) plags don't give that you option. you usually get to choose between not more than a couple dozen. most of what you have to choose from isn't all that grand. i don't know if i would waste my time trying to change that. that's okay. an aisha doesn't have the high management fees. it the one big difference is that with many 401-plans, your moyer will match some of it and you would be a fool tonight take it.
much you can contribute. so contribute as much as you can to get the full match and stop there. don't put another penny in it. at least not until you've maxed out your 401(k) contributions. you want to put the rest into an individual retirement account. if you want to know whether to use a regular ira or a roth, may i suggest you pick up stay mad for life. it gives you much more detail. you pay no taxes or fees. they're allowed to compound. you start withdrawing the money. at which point you get taxed as regular income. still a pretty sweet deal. you can only pour $5,500 a year
like me you're over 50. in that case you can give $6,500 a year. i say you should max it out drier. if you want to contribute more 401(k). that's only after you've maxed out your ira. they are limited. you should get the full match from your employer. after that, all your retirement savings should go into an individual retirement account. if. just start by contributing to your ira and keep going until you max it out.
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we've got to get to work. your tweets. \ou've went sending me tweets. our first tweet from -- he asked how do you take advantage of the correlation among, not between, stocks, bonds and money markets to steadilyio an ira? this is very easy. it depends on your age. if you're a younger person, i don't want to see any bonds. what are you going to do? kounld at 3%? i want to see stocks with dividends. as you get into the middle ages, you can start loading up on bonds. we need to make money with our money. we can't do it with the bond money. next, i'm looking at did i have denied stocks. when is the best time to purchase and what evaluation do i review? there is a terrific letter. he worked with me for a decade. he tells you which dividends are safe and which ones aren't.
at beacher 5084 asks, at mad money. pay off car, house or invest it? pay off the car. house, let it run. your mortgage can be very low. you might get a better return from did i have denied stocks and get that mortgage money. that's a no brainer for me. let's get to our next tweet. this comes, what percentage should people save/invest? my advice is that you should take a look at your your discretionary money would be, away from eating. that's the money i want to see put away. movies. try it. i did it for two years and i cannot believe how much money i was able to save. two years when i got out of law school. we have a tweet from at little feet farm. how many stocks is too few to own?
we are professionals. we know how to do the analysis. if you're an amateur home gamer, it's too hard. let's go here. locked student loans. less than 3%. you are brilliant. that's what i want. take a look. some of higher yielding utilities are very good. the individual, the iyr. those are perfect for you. our next one comes from sean. at mad money, how much is too much? first i know a bench mark of too much changing around. do not change 26 times a week.
don't make any changes. we only make changes when the circumstances are bad. changes. >> do you favor any chanss. this is the most important thing. foinld someone else who has a financial adviser and recommend that's person. i've discovered that this industry, most people are too small for the big guys. i have been on fights, representing people who have $100,000 and don't get any treatment at all of any sort of personal touch. you have to find someone who in your it's friday, november 27th. coming up on "early today," shoppers online and in the